Last month, I was in France on a wine-tasting tour. Warren Buffett was in Europe at the same time, but he was doing some bargain-hunting. Buffett told a news conference in Frankfurt, Germany that the opportunities in Europe are much more attractive than those he's seen in North America or the emerging markets.

There should be plenty of bargains. As of last week, the Paris CAC-40 Index is down 11% so far in 2008, [while] the German Dax is off 14%. Those losses are more than double the declines experienced by the major US indexes.

So, Europe must be in even worse shape, right? Wrong! The 15 Euro Zone countries—those that have adopted the euro as their official currency—showed a GDP growth rate of 0.7% during the first three months of 2008. However, if the same method used in the United States is applied, first-quarter growth came in at a very healthy 2.8%.

So, if everything is ticking along so well, why are the European stock markets diving? Blame it on the proverbial "wall of worry.” Some of the concerns include the following:

The rise of the euro. The euro has gained more than 7% against the US dollar in only five months. This makes the price of European goods more expensive for US buyers, and there are fears the result will be a weakening in exports.

Oil prices. Europeans have always paid more for fuel, but now they are starting to rebel. While I was in France, fishing boats staged a blockade of some of the ports on the English Channel and France's Mediterranean coast in protest against high diesel costs.

Inflation fears. As in North America, high oil prices are sparking inflation concerns, which in turn are keeping European interest rates higher than those here. The European inflation rate actually declined slightly in April, to 3.3% annualized, thanks in part to the strong euro. But that is still well above the target set by the European Central Bank.

Unrest in France. The French are famous (or infamous) for street demonstrations and crippling strikes. While we were there, the national transportation system was partially shut down for a day and teachers walked out of schools. However, this round of protests seems to lack the passion of those of years past. It's now generally expected that President Nicolas Sarkozy will pull the French kicking and screaming into a new era.

Housing blues. There are tentative signs that the American housing slump may be replicated on the other side of the Atlantic. The problem is especially acute in Britain where mortgage financing is increasingly tight, foreclosures are rising, and prices have come off their lofty peaks.

So is this a good time to invest in Europe? Clearly, Warren Buffett thinks it is, so the rest of us would be smart to pay attention.